How to Write a Business Plan
This is a summery of an awesome lecture I just attended in the University of Salford about entrepreneurship, hope you find it as helpful as I did! :)
Introduction:
starting your own business is a great step, but before taking it there are few things that you need to keep in mind, and the most important of it all is RESEARCH!
you don't have to conduct research from scratch, you can use second hand research and that will do it, and some areas need to be considered, like:
- the size of the market
- competitors
- business structure
- how to finance
- how to find the right customers
- WHAT DO CUSTOMERS WANT! >> that's the MAIN one
Identifying YOUR customers is the starting point, and you can do that by thinking of your idol customer; their looks, their style, their social levels and the amount of money they can spend; their EXPENDITURES. After that you can think of segmentations, in other words thinking of the market sectors that supports your product.
After finishing off your research, you should start writing a BUSINESS MODLE, which will make it even easier to write up your business plan.
Business Model:
it's basically a written process of a brief explanation and a summery of your business that will fill only three papers. It should include how this business will be done, customers, charges and profits.
There are two main goals from this:
- To give you the focus you need and the GO.
- To arrange the key points to present it to the client. >> it'll help you in your elevator pitch!
Example to practice your Business Model:
say you will do a business about HORSES, you can choose an area:
Horse Riding Centre
identify your customers: adults, and children
paying customers: parents with 1-3 children, middle class, boarding and private schools, brides, older couples, young professionals, and around that.
decide on services: horse riding, horse riding lessons, birthday parties, horse grooming, & weddings.
Profits: will be made from the services.
Needs: Lands, horses, and the right location.
Ways to Finance it: maybe the government? a loan?
Location: half an hour from Manchester
Times: after school
The above is just an example of a very brief business model, and doing something like that for your business will really help you focus and have a strong start.
Pricing:
ok so we figured out some plans, what about pricing? how do you price your products or services?
do you go HIGH or LOW?
if you go high, then:
you will have a low initials, but with a quick recovery, and it will be easier for competitors to copy you, so it will be a low market with a slow penetration to customer houses.
if you go low, then:
low gross profit, BIG sales, rapid markets, quick growth, and creates barriers which makes it harder for competitors to copy.
Life Cycle of a product:
this is important to know, for every product there's a life cycle where it's born then it dies.
- The introduction of the product: putting your product out there and marketing it, and telling the customers about the product (to educate them of its importance).
- The growth of the product: focusing on the product at hand without introducing any at that point.
- The maturity of the product: aggressive marketing, brand development, loyalty programs and promotions.
- The decline of the product: where the life span is over and it's on sale.
Costs:
there are two important things in the products costs that you need to know about:
- Fixed costs: costs that are fixed regardless of outputs (like bills).
- Variable costs: varies depending on the output.
At the beginning you might not make much, but always make sure to break even, and doing a schedule of daily, weekly and monthly is a key.
These are just few pointers, and I hope they help you start a great business plan! :)
